Managing Director Kristalina Georgieva’s Remarks at the 2020 Paris Peace Forum
November 12, 2020
Thank you wholeheartedly, President Macron, for bringing us together as we are wrapping up 2020–and getting ready for the next year to come.
Going back in history, the last big crisis, the Global Financial Crisis, brought the world to a realization that the banking system ought to be more resilient. We did that and today we benefit from it. We have financial stability even in the midst of this severe crisis.
The question in front of us is: are we going to step up yet again and build greater resilience to the shock we are facing now and those to come in the future?
In other words, is 2021 going to be a year in which we write yet another ‘Tale of Two Cities’—more inequality within countries, across countries, across generations? Or will 2021 be the year in which we come together to build a more prosperous, more equitable, more sustainable world?
I so strongly believe that what we are doing today is mobilizing for the collective action that will determine where we will land.
In that regard, I want to recognize that 2020, the year of the worst pandemic in a century, the year of the worst recession since the Great Depression, is also the year in which governments and central banks have acted in a synchronized manner, decisively, and put a floor under the world economy—$12 trillion in fiscal action and massive liquidity support from central banks.
It is also the year in which we have seen incredible momentum in vaccine research, as Charles Michel just said.
I will also give you another small example of cooperation—something to which many people probably did not pay much attention: this was the year in which the IMF got a new member country. Andorra, a small country, became the 190th member of the Fund—a small symbol of the big message that we are in this together.
So, what does “being in this together” mean for the next year? Let me make three points:
First, it means we need a strong public investment push to lift up growth—at a time when we have ample idle capacity and interest rates are very low. We ought to do this in a coordinated manner and deploy it with the objective to address the other crisis we are all facing, the climate crisis, as well as with the objective to promote digitalization—so we can have a more equitable world.
And if we are together–if G20 countries move together, invest together at the same time rather than in an unsynchronized manner, we estimate that they could spend a third less to achieve the same outcome than if they acted alone.
In this way, we can build an impetus for growth and jobs—and do it more effectively by working together.
Second, as we do so, we must not forget the developing world. We must make sure that they have liquidity and that we have investment there as well. Because if we don’t, the risk of deepening inequality is high. And the loss of what we have achieved in the fight against poverty can be very real. As President Macky Sall stressed, actions to boost inclusion within and across countries is vital.
I want to vouch for the IMF’s commitment to be part of this boost to high-quality, green public investment. And I would like to make sure that we make the best use of the SDRs so we can help the developing world make progress.
Third— last but not least—in this collective action, we ought to think of what we leave to future generations. It cannot be that we load them with unsustainable debt. It cannot be that we miss out on greening their future.
So I am very keen to see action on these fronts: on public investment with high quality—which can help with its fiscal sustainability, generate income and boost growth; on dealing with debt early, not waiting if debt has to be restructured; and on improving tax systems so we can have ones fit for the 21st century.
How can it be that we have the digital economy benefiting greatly from this crisis, and yet we cannot agree on fair and global taxation of these activities to ensure that the benefits and the burden of development are shared?
In conclusion, the magnitude of the challenge facing us all today is great. But what I felt here at this meeting is that our cooperative spirit is even greater. And when we come back here for next year’s Paris Peace Forum, we will celebrate acting together.
Merci, Monsieur le Président.